major global influences at the start of the new millennium

Major Global Influences Aurora Consulting Group

Scenario planning june 2002 1

Major Global Influences at the Start of the New

Millennium

Expanded version of what was presented separately to Brisbane City Council

(1998), CPA (1999) and Accor Asia Pacific Group (1999)

by

Bill Synnot, Aurora Consulting Group

18th Floor, 300 Queen St., Brisbane

Phone: 0418 196707 , Fax: 07 33997041

Email:[email protected]

Summary This paper identifies 8 influences expected to have the most impact globally at the start of the

next millennium, and provides an elaboration of each influence selected. It assumes that the

millennium computer bug is no longer a problem.

The major global influences for the start of the new millennium will be

• Globalisation v. Regionalisation • Demographics

• Abundance v. Scarcity • Leadership v. Management

• Economic Short-termism v. Sustainable Development • Science v. Technology

• Materialism v. Spiritualism • Social Cohesion.

These influences overlap and are linked.

Of all the influences, technology is the one that is able to both create tension and to provide the

solution to the other influences. Technology and knowledge are inextricably linked.

Knowledge, which can be identified as brain power (include being street smart), intellectual

property, innovation and creativity, is becoming the prime factor of production, and as a result

becoming more important than land, labour and capital in the creation of wealth. This new

paradigm will be marked by hyper-competition, successive technological revolutions, and



social dislocations and conflicts. All this is creating a degree of high unpredictability and non-

linear conditions. At the same time, knowledge is recognised as being culturally-based and

value-based (what is rational in one culture can be irrational in another).

On the other hand, the social cohesion (which includes relationships) is the vehicle that is

required to mitigate the negative consequences of these other influences, especially for handling

the paradoxes like globalisation v. regionalisation/marginalisation, etc.

Future success stories will be those who continually staying ahead of the change curve,

constantly redefining their industries/businesses/activities, creating new markets, blazing new

trials, reinventing the competitive rules and challenging the status quo. While those in �the me-

too-crowd�, who just respond to change, will be left behind.

Introduction The aim of this paper is to stimulate discussion of the 8 global influences and their justification

for selection. It is not as comprehensive as may be desired, but draws together many of the

central ideas for more focused exploration.

Four assumptions underpin the core discussion in this paper, and they are areas of consensus,

cusp, new terminology required, change - a new paradigm required and success criteria for

the 21st century.

• Areas of consensus

There are 2 areas of consensus amongst most forecasts for the future. It is agreed that

- we are approaching a point of critical mass from which there is no return, especially with the

current global fragility and complexities;

- the future will be different from the past, as a result there is a need for a paradigm shift in

thinking and action as our present paradigm is unable the handle the present situation, let

alone the future

• Cusp

There is an urgent need to scrutinize the actions of today in relation to the implications for

tomorrow. A �cusp� is required: in other words, the right ideas or document to be presented at

the right time in the right style that is acceptable to enough people so that effective action is

developed to handle the situation.

When an old paradigm crumbles and anew one is not yet fixed in-place, we get a great burst of

creative thinking. This is occurring now, with the collapse of the industrial paradigm and the

dawn of the knowledge-based paradigm.



• New terminology required

There is a need to re-work the terminology which reflects our current mindset, and which is not

helping us to think of ways to jump out of this mindset into the new one required to handle the

future. For example, when people are discussing �career�, most think in terms of careers via

work, employment and jobs with an employer from the time of finishing formal education as a

youth through to retirement. Currently the nature of a typical US worker�s job changes 6 times in

a lifetime. Yet career is a much broader concept, and this emerging reality has been accurately

described as a portfolio career, ie the combination and sequence of roles played by a person

during the course of a lifetime, including activities around the home and for the community, etc

that is defined by you - in other words, the concept is more holistic and includes self-

employment.

Words like plan, operate, control and measure have less meaning in our turbulent world, while

words like accountability, responsiveness, �buy-in�, flexibility, stewardship, innovation,

adaptability, etc are more meaningful.

• Change - a new paradigm required

It has become a truism that the only constant is discontinuous, accelerating change. As Charles

Darwin observed

"... it is not the strongest of the species that survives, nor the most intelligent; it is the one that is

the most adapted to change..."

As Willis Harman claimed

�...change happens when a lot of people do a lot of things a little differently...�

and these small increments can be the building blocks towards a more fundamental change.

Furthermore, change can be unpredictable, unanticipated and turbulent, which creates uncertainty

in the minds of individuals and organisations about the future. With accelerating, discontinuous

change it is impossible to account for all the initial conditions and minor disturbances that can

have major impact on individuals and organisations. Things are happening out there that our

current mindset cannot explain. Thus, both individuals and organisations need to maintain

maximum flexibility and adaptability to productively handle the unpredictable and unknown

ahead, ie terra incognita (the uncharted landscape of tomorrow). We have got to learn to live

with chaos and uncertainty, and try to be comfortable with it.

This requires a new paradigm based on a different set of assumptions.



As proposed by David Brown and Larry Brooks, all aspects of the universe are

• interconnected;

• there are no absolutes;

• human behaviour can be understood only in the context in which it occurs;

• the subjective frame of reference of human beings is the only a legitimate source of

knowledge.

As individuals understand their environment and participate in events, they define themselves

and their environment in this context. Furthermore, there are no permanent paradigms!.

Today's knowledge revolution is forcing organisations to operate in radically new, continually

shifting ways. The faith of the industrial age in such things as vertical integration, synergy,

economies of scale and the hierarchical, command-and-control organisation is giving way to a

fresh appreciation of the following elements:

- outsourcing, especially of non core activities

- core competencies are now regarded as less significant than innovation in the area of

product, production and organisation (especially in communications, information, advanced

materials, electronics and biotechnology industries)

- economies of scale are less valid than economies of scope (the ability to supply a wide range

of different products)

- profit centers linked with clusters of large, highly skilled labour supply

- networks and other diverse forms of organisation that allow life-long learning.

Every shred of industrial-era thinking is now being rescrutinised and re-formulated.

Despite the discontinuous, accelerating change, some things are not changing in a macro sense;

these include cycles of day and night, the seasons and humanity's basic needs for survival (food,

water, reproduction and shelter).

• Success criteria for the 21st century

Robert Theobold advises

�...The required success criteria for the 21st century are ecological integrity, effective decision-

making and social cohesion...�

Ecological integrity is replacing our current commitment to maximum economic growth

(compulsive production and consumption, and the resultant waste), with sustainable ecological

development.

Effective decision-making will be more at the �grass roots� of the community rather than

through top-down policy shifts.



Social cohesion is necessarily linked with effective decision-making as more people realise that

the traditional answers and policy measures from �experts� are of dubious efficacy.

Currently we are in a state of co-intelligence as described by Tom Atlee:

�...things are getting better and better and worse and worse, faster and faster...�

Major Global Influences No 1 Globalisation v. Regionalisation

(including localisation, tribalisation, marginalisation & fundamentalism)

Globalisation can be discussed at 4 levels:

• world-wide (the growing level of economic interdependence);

• national (the extent of an economy's inter-linkages with the rest of the world);

• industry (the extent of an organisation's competitive position within that industry in one

country is interdependent with that industry in another country);

• organisational & functional (the scope of an organisation and its functions to expand

beyond borders).

There are 4 trends at the core of globalisation, as stated in The Financial Review:

�...- an ever increasing number of countries are embracing the free market ideology;

- the economic center of gravity is shifting from the developed to the developing countries

- technological advances are constantly improving communications;

- the opening of borders to trade, coupled with investment and technology transfers, creates

new market opportunities for companies but also enables competitors from abroad to enter

the home market...�

Despite the current hiccup of the Asian crisis, the change in economic gravity to the developing

countries will continue.

Globalisation has blurred geographical, economic, social and political boundaries to make the

world a networked place. This process has fostered increasing interdependence and trade

liberalisation, as expressed in increasing cross-border flows of goods, services, capital and know-

how. Furthermore, it has resulted in the increased competition, visibility, transparency and

accountability of the world. It has also facilitated direct interaction between organisations and

their customers, as the traditional distribution channels and mass advertising approaches are

bypassed.



So far globalised industries tend to be dominated in every market by the same set of global

companies which co-ordinate their strategic actions across countries. Nike, Reebok and Adidas

in the sports footwear industry are examples of this.

With globalisation, we are witnessing the increased universal use of English for communication.

Paradoxically, globalisation has highlighted an increase in regionalisation (localisation,

tribalisation, marginalisation & fundamentalism). As a result, the expression

�...think globally but act locally...�

is very applicable. Localisation and protectionism are a reaction by regions to factors like

globalisation and market failures. Examples of this are seen in the defence against globalisation

is the native populism and protection of national cultural identity, ie the EU partly justifies

spending around $60 billion annually to European farmers on the basis that it is maintaining a

�rural heritage� in the EU. It can be evidenced in the increasing tribalisation or the embrace of

fundamentalism as seen in the Old Soviet Union and its former satellites, like the Balkans, and

in Africa and the Middle East. This type of activity will increase as local communities strive to

maintain their own identities while coming under increasing pressure for integration and

uniformity from globalisation and Westernisation, ie a homogenous, monochrome global

culture of fast music, fast computers and fast food. Marginalisation is more a reaction to market

failures, and some of these failures are the result of globalisation. In the extreme cases of

marginalisation, the response can be terrorism like in the Middle East and Balkans.

Globalisation and technological change has produced an increasingly differentiated labour

market, ie those that have the new knowledge (knowledge worker) and those that don�t.

Major Global Influences No 2 Abundance v. Scarcity

(non-renewable v. renewable resources, �haves� v. �have nots�)

Non-renewable resources are diminishing while renewable resources are abundant. As the

current usage rate of non-renewable resources is unsustainable, there will be a switch to

alternative, renewable resources. For example, in energy usage there will be a switch from the

use of non-renewable (and polluting) resources like coal and nuclear power, to more

renewable resources, like biofuels, solar, wind and water (tidal & hydrological). While the

ownership of non-renewable resources is in the hands of the wealthier regions (�haves�), the

non-renewable resources are not; however, the technologies for the use and distribution of

renewable resources are still controlled by the wealthier regions.



A substantial portion of the world's population (�have nots�) is subsisting on minimum incomes,

more often than not below the poverty line, at times when sufficient productive potential is

available to supply the needs of everyone. Robert Theobold writes:

�...United Nations figures showed that in 70 countries, citizens are now on average poorer than

they were in 1980. In 43 countries, they are poorer than they were in 1970. To support this �The

Guardian� newspaper claims that the richest 20% of the world's population increased their

share of total global wealth from 70% to 85% over the same period, while the poorest lost

ground moving down from 2.3% to 1.4%...�

Previously, economic growth came from increasing resource inputs and/or increasing consumer

demand and it has been demonstrated that the use of resources and technology can raise the

productivity of a pre-industrial and unskilled manual labor force to world class levels in virtually

no time, as happened in Korea and, more recently, Thailand. Technology - brand new technology

- is generally available quite cheaply on the open market eg digitalisation (mobile phones).

Yet future economic growth will come from a very sharp and continuing increase in

productivity initiated by knowledge work (intellectual capital) and knowledge workers.

Despite the readily available knowledge for emerging countries, they lack the infrastructure, like

educational facilities, that the developed countries possess in knowledge work. The knowledge

workers will have the economic power, and these people will be concentrated in current

developed regions like USA, EU, and Japan - which gives a decisive competitive advantage to

these regions.

Knowledge is different from all other kinds of resources. It constantly makes itself obsolete;

with the result that today's advanced knowledge is tomorrow's ignorance. To manage this

situation, both individuals and organisations are necessarily developing life-long learning

processes. Knowledge is now subject to rapid and abrupt shifts; from a pharmaceutical emphasis

to genetics in the health-care industry, and from PCs to the Internet in the computer industry. The

implications of this are that the world economy will continue to be highly turbulent and highly

competitive - prone to abrupt shifts as both the nature and the contents of relevant knowledge

continually changes.

The gap (especially financial) between the �haves� and �have nots�, in individuals and regions,

will widen, and thus increase the potential for social unrest and conflict. This gap is most

obvious in the political/trade blocs, with the blocs of the �haves" being found in the under-

populated, developed regions of the world (Japan, nations of Europe, and North America). As

these blocs (EU, NAFTA, APEC, etc.) become more significant, their growing strength will

heighten the dissatisfaction of the �have nots� who desire to rise to the levels of wealth of the



�haves�. Their lack of understanding as to why this is not possible, without unsustainable

ecological damage, will only intensify this conflict potential.

Major Global Influences No 3 Economic Short-termism v. Sustainable Development

(ecological and sociological)

Economic short-termism stresses short-term performance indicators like financial returns on

monthly, quarterly, 6 monthly and annual reporting cycles. Yet ecological cycles do not follow

the business reporting periods. As Ron Passfield warns,

�...We see profitability and bottom-line as realities divorced from connections with nature and

society. We fail to see that the real bottom-line is you, me and our environment...�

As a result, our current corporate and government organisations are unable to achieve the

delicate balance required under the concept of sustainable development. Passfield further

observes,

�...We have focused on the cost side of the profitability equations to the exclusion of the

capability and the revenue side. We have become obsessed with cost cutting (and in the process

increased the organisational and social cost) to the exclusion of capability development - the

source of sustainable profit and sustainable competitive advantage..."

To achieve capability development, we need to develop flexibility and responsiveness,

creativity and innovation, diversity and adaptability rather than maintaining the control,

accountability and conformity approach that is being required under economic rationalism.

The trends towards privatisation/commercialisation/corporatisation in the public sector will

increase, in an attempt to improve both the efficiency and effectiveness of public resource usage.

At the same time, criticism is increasing about the equity issues (social cost of downsizing, loss

of expertise, etc) that are associated with this trend. Thus there will be an increasing trend to

community-based resource deployment (more control of resources at the �grass root� level).

The free market, as a basis for economic efficiency and effectiveness, may indeed be a better

mechanism for making choices than government control. However, the free market model

(price mechanism) is based on the unrealistic assumption of perfect competition (equal access

for all). This type of assumption is not valid in the real world, where access is not equal.

Furthermore, the free market is ill-equipped to handle the equity issues, and satisfying

community needs and desires of social cohesion, cultural strength or long-term ecological

viability. There is enough evidence to suggest massive social injustice and environmental



disaster if everything is left to market forces alone, and thus free markets need to be managed

within ecological and social constraints.

In the poorer countries, ecological problems are closely linked with population increase, where

as many as 70 percent of the population are under 25 years old. In the wealthier countries, on the

other hand, ecological problems arise from increased production of goods and services, and the

accumulation of waste that results from the pursuing of maximum economic growth at the

expense of environmental sustainability.

For sustainable development, both cultural and ecological diversity are essential for survival.

David Suzuki highlights this duality:

"... Cultural diversity and biological diversity go hand in hand...... cultural diversity has been

just as crucial to humanity's continued vigour and success in a variety of ecosystems......Nature

is in constant flux, and diversity is the key to survival......diversity confers resilience, adaptability

and the capability for re-generation..."

Thus there is a need for ecological literacy (understanding the principles of ecological

communities and their ecosystems), using those principles for creating sustainable human

communities. This paradigm challenges current mindsets about the nature of organisations,

profitability and sustainability, and is in stark contrast to the impact of economic rationalism as

discussed above.

Fritjof Capra has identified a set of key principles that foster sustainable ecosystems and which

apply to achieving sustainable profitability:

• interdependence (interconnection and mutual dependence of all members of an ecological

community such that the success of an individual and the whole are interdependent);

• relationships (the web of life involves a vast and intricate set of relationships that need

nourishing);

• multiple and non-linear feedback loops (small disturbance can be amplified by multiple,

interdependent feedback loops);

• cyclical nature (nutrients are continually recycled as the waste of one species is food for

another - there is no waste in nature);

• diversity/variety (it is essential for the survival of an eco-system as it provides richness and

sustainability).



Major Global Influences No 4

Materialism v. Spiritualism

(free market v. equity issues)

Materialism spawns a belief system that awards credibility to numbers and seeks contentment in

their apparent solidity and tends to ignore the social and human issues. As people are overloaded

with data and information, the enumerated list resonates favorably because it promises to present

facts in a finite and controllable package. It must be remembered that data is not information,

information is not knowledge, and knowledge is not wisdom.

Materialism as shown by conspicuous consumption runs the risk of reducing rather than

improving the quality of life. The world�s richest 20% account for 86% of expenditure on

personal consumption. With increasing access to information more people are becoming aware

of the inequalities.

Furthermore, with life becoming more complicated and uncertain, there is a nervousness about

the future - with a resultant re-newed interest in the simple things in life in the wealthier regions.

This trend is strongly allied with a movement towards personal spiritual discovery. In some

cases people are increasingly seeking black and white answers to some of life�s enduring

questions, and fundamentalism and philosophical absolutism promoted by cults and extremists

are appealing to a broad section of the world populace.

Linked with this return to spirituality is the search for community. Formal and informal

associations are enjoying a revival. Worldwide trends in the wealthier areas of "new urbanism�

aim to provide a better quality of life by putting residents' daily necessities - work, food,

shopping and socialising - within walking or bicycling distance. Safe urban environments and

unmatched cultural opportunities are prompting a revival of inner cities.

More and more people are adopting a holistic and preventive approach to life (especially

health), and embracing a concept of �right livelihood" (the desire of people to make a living in

ways which satisfy themselves and respect ecological necessities). Thus the relationship between

work, income and prestige has changed and will continue to alter. Previously these aspects of life

were a single package: people's jobs determined not only their income but also their status as

well as their ability to experience work satisfaction. This nexus is being broken, with the choice

of whether to hold a traditional job, or not, increasingly a lifestyle choice in the wealthier

countries.



Differences in thinking and attitudes will intensify over family value issues that include attitudes

to life and death, human cloning, genetic testing, an increasing, productive life span and assisted

suicide.

Cyber space is emerging as a powerful medium for forging friendships, business relationships

and cyber communities. Already cyber communications is more convenient and less expensive

than traditional means of communications like phone and mail.

Major Global Influences No 5 Demographics

(ageing population v. youth, �haves v. have nots�, generation gaps)

With the declining birth rate in the developed world (�haves�), the younger people will be

unable to handle the increasing burden of supporting a growing population of older, non-

working people. For example, in Japan it is predicted that the country's population will drop

from the present level of 125 million to 55 million - a 56 percent drop - within the 21st century.

Furthermore, the mix between the younger people of prime working age and older people in

these developing countries will deteriorate at about twice the rate of the drop in population. Even

if a baby boom began soon, it would take 25 years for these new babies to become fully educated

and productive citizens. In other words, one of the few certainties is as Peter Drucker points out,

�...the under population of the developed countries is an accomplished fact...�

Furthermore, results of the recent cellular research suggest that one�s "productive" years may

extend far beyond what the average person experiences today and these shifts, and how we work

and live, have enormous implications for everything from long-term financial planning to leisure

industries, from education to health-care. With these demographic trends, as Drucker observes,

�...the future has already happened...�

We are creating it now.

On the other hand, the �have nots� will continue to have large population growth, which will

put increasing pressure on both the domestic use of resources, and on �haves� to share resources

with �have nots�.

In the wealthier countries the different generations have been described as �thrift generation�,

�baby boomers�, �X generation�, �Y generation� and �Z generation�. The Courier Mail

defines



• the thrift generation, as born before 1940, and thrifty irrespective of wealth; they hate any

form of waste and have acquired wealth beyond their expectation owing to inflation and

superannuation.

• the baby boomers, as born between 1945-1960, are demand-driven, and at the first signs of

marital stress they divorce; generally they lack spirituality; they dictated the arrival of Big

Mac, blue jeans, retirement villages, KFC and crematoriums, and wealth creation is

important to them.

• the X generation, as born between 1964 - 1975, is insecure, and afraid that their parents

would divorce, they possess a strong sense of failure; they are not interested in commitment

and prefer genuine friendships between sexes without romantic involvement.

• the generation Y, as born between 1975-1985, have developed individual values; they are

spiritual; they are fearless of technology and take for granted many things the baby boomers

saw as treats; they are not into wealth creation and prefer to work to get money to spend on

holidays.

• the Z generation, as born after 1985, and are called the Infotronic Generation with a

dominating interest in electronic communications like television, home computers and other

electronic gadgets.

The differing attitudes of generations will need to be considered. For example, the aging baby

boomers, who are in positions of power and influence, do not see �retirement� as the end of a

productive working life. Furthermore, if population growth falls below replacement rates, people

may have to work longer to provide the wealth required to pay for health care and pension,

especially with other pressures for the public money like child care and education. Also, amongst

the baby boomers there is an increasing trend to SKIN�s mentality (spend kid�s inheritance now)


(Roles of Leadership v. Management)

Despite a frequently verbalised preference for stability (with reference to family, job,

personality, job history, economic growth, organisation, political system, and currency, etc.), it

is no longer the norm. Increasingly, the wor ld environment is becoming more

vo lat ile - witness the current problems in Asia (especially Indonesia), Lat in

Amer ican, Middle East , Russian and Balt ic �war�.

As the Harvard Business Review informs us



�...it is a world of dynamic, quantum change where the patterns of the past can become a

hindrance rather than a help...�

One third of the current Fortune 500 organisations have emerged in the last 7 years ago.

Competition comes from where you least expect it. In a recent survey commented on by Gary

Hamel, it was found

�...industry newcomers - not the traditional competitors - had taken the best advantage of

change over the past ten years......by profoundly changing the rules of the game...�

Tim Flattery and Rosemary Herceg observe that the traditional business rules threatened are �...

• brand creation as a long-term proposition

• consumers are loyal

• the cost of entry is high

• traditional advertising is essential

• full-time employment is the answer

• sticking to core business is the only way to grow a business...�

People like Murdoch, Gates and Branson do not play by these rules, and this trend is expected to

intensify.

In this new world, competition will be fierce and markets merciless; small organisations will out-

smart giant corporations on a global scale; customers will have infinite access to products,

services and information; networks will be more important than nations; to survive business will

have to operate in �real time�.

Organisational thinking will move away from an emphasis on linear, analytical, straight line

(cause and effect), quantifiable, convergent (only one best way) thinking to a more systematic

and holistic approach with divergent (more than one answer) thinking that involves the likes

of action learning, double loop-learning, self-organizing systems, positive and negative feedback

loops, instability within stability, etc. Part of this trend involves understanding how the Chaos

Theory works.

The basis for Chaos Theory is that the universe is uncertain, problematic and complex: order

within disorder or without predictability. As Gil Sawford states:

�...Chaotic systems display a repetitive pattern, constant fractional dimensions at all levels of

scale. The evolution of these systems is sensitive to initial conditions and to continuous small

disturbances. Owing to the difficulty of stipulating precise initial conditions, their behaviour is

unpredictable and random. Chaotic systems are deterministic, but you do not know what you are

going to do next. When applied to non-linear feedback systems, Chaos can explain how



variations in inputs and continuous small disturbances can quickly produce confounding

variations in outcome. Accurate predictions are hard, if not impossible, to make as a feedback

loops magnifies variations, taking the system to a state that we are unable to determine......The

long-term future is not only unknown, it is unknowable, and the efficiency of long-term planning

is delusive. The border between stability and instability is a compromise of both order and

recurring disorder. This border is far from the equilibrium state of chaos where specific long-

term outcomes are unknown. This can be represented graphically showing the original shape of

stability recurring over and over again. Humans are able to use this recurring patterns analogy

by reflecting on experience and adapting to new situations. This allows us to create reasonably

predictable short-term futures, and long-term futures that can be managed in an emergent

way...�

As no one alone can create an environment that ensures continual innovation and infusion of

knowledge, a �community of leaders� will need to evolve. Peter Senge believes that this will

involve:

• local line leaders who assume bottom-line responsibilities (such as managing business

units);

• executive leaders who act as mentors to local alignment leaders;

• internal networkers who move about an organisation generating and fostering commitment

to new ideas and practices.

Senge's perspective suggests that in knowledge-creating organisations, these 3 types of leaders

will be mutually-interdependent, and thus previous hierarchical models of leadership will be

outmoded.

In a similar vein Warren Bennis talks about �leaders of leader�:

�...They will decentralize power and democratise strategy by involving a rich mixture of different

people from inside and outside the organisation in the process of inventing the future. They will

be comfortable with a concept of discontinuity and will understand how to use it to create

opportunities. They will enjoy change to encourage a pro-change culture in organisations, and

be adept at fostering creative collaboration, ie a hierarchy of imagination..."

Furthermore there will be a return to 3 important interrelated activities that disappeared in the

age of specialisation: Senge identifies these as

• research (the disciplined pursuit of discovery and understanding that leads to generalisable

theory and method);



• capacity building (the enhancement of people's capacity and knowledge to achieve results in

line with the deepest personal and professional aspirations);

• practice (people working together to achieve practical outcomes and building practical

know-how in the process).

The future belongs to those organisations that are prepared to look away from the traditional

management competencies (linked with technology and economic imperatives) to cultivate

vision, daring, innovation and creativity in their executives and staff. This focus will need to

be reflected in the reward systems.

The traditional hierarchical structure of management (control and command, and top-down

directive style), will change in favour of a more fluid, flexible, co-operative, collaborative and

adaptive structure, like the virtual organisation. The autocratic, aloof, status-conscious,

competitive, convergent-thinking, left brain-dominated executives will be less of a force in the

future in senior management. Attributes of leadership will be less attributed to "personal

charisma", and more to being in tune with followers� needs and development and divergent

thinking.

John Kotter writes that we are over-managed and underled, and that leadership and

management are different. Leadership competencies are about stretching, inspiring & creating,

while management competencies are more about organising, controlling & maintaining.

Management is transactional, ie operates in a currency of co-operation; leadership is

transformational, ie out to change the currency of operations. Management is a set of

processes that can keep a complicated system of people and technology running smoothly, ie

planning, budgeting, organising, staffing, controlling and problem solving. Leadership is a set

of processes that creates organisations in the first place or adapts them to significantly changing

circumstances, ie defines what the future should be like, aligns people with that vision, and

inspires them to make it happen despite the obstacles. Usually leadership competencies can

build on existing management competencies rather than replacing them. The leader�s job is to

establish the processes and environment by which people learn together. The relationship

between leaders and followers must be one of trust and shared values...� As Lao Tzu wryly

observed,

�...When a leader leads well, the people say they did it themselves...�

The core leadership philosophies will include understanding the paradigm shifts and new

language in thinking. This includes concepts such as generative systems; corporate ethics,



values, virtues and behaviour; multiple intelligences; millenarian memes; spiral dynamics; social

systems (archetypal) theory, languaging; accelerating systems (change appreciative inquiry).

Too much past success and growth of large organisations has emphasised the need to manage,

rather than lead. Only leadership can blast through the many sources of inertia, and it can begin

with one or two people. At the same time, competent management is needed to stop the change

getting out of control. Thus leadership and management must work in tandem.

Leadership and authority are based more on empowered competence and knowledge, skills,

wisdom, perspectives and experience, and this will replace the dominance of coercive power.

This new type of leadership has been described as servant leadership (those who seek to

empower others rather than to control them), and sapiential authority (people and communities

are empowered by having the power, including the resources and ability, to make their own

choices more often). The use of new electronic tools, like the Internet, is helping this

empowerment to gather momentum. As result of this, there will be less power in the hands of

bureaucrats (in government and non-profit organisations) whose ability to make a living depends

on their ability to impose solutions on others - whether they want them or not. In fact,

bureaucrats will return to being public servants, ie servants of the public. This empowerment

allows communities to develop a social cohesion and sense of accomplishment that so many are

lacking today. It is based on people developing personal self-esteem. Robert Theobold stresses

the need

�...to allow people the time and commitment to get involved in decision-making means that there

is the need to decrease lifetime hours spent on jobs; discourage consumption rather than

promote it; provide people with opportunity to learn on a lifetime basis; reintroduce spiritual

values into decision-making processes & use them as a compass...�

In the wealthy regions many consumers will be delivering a single message to product and

service suppliers

"..when it comes to life's chores, the things I must do, please do what you can to simplify them.."

These same consumers are becoming increasingly

�...cash rich but time poor...�,

and want more free time to do things they enjoy. This will place increasing emphasis on

innovations (eg �pay at the pump� technology, pre-packaged goods like meals, and online

grocery shopping coupled with home delivery).

Those entering the workforce today are more likely to have more career changes and a longer

working life. Awareness of the necessity for life-time learning and employability gained by



increasing levels of skills and expertise will result in more career changes, and less loyalty to an

organisation.

There is a trend for careers to move from �deterministic planning� to emphasizing �emergent�

careers which are multi-directional and probabilistic. It has been suggested that in 10 years time,

70 percent of the jobs that people will be doing do not currently exist - in the current

environment of accelerating and discontinuous change, one only has to look back 10 years to

appreciate the accuracy of this statement. There will be new ways created and invented for

accomplishing the field of work, and those who adopt a reactive standpoint will be left behind.

Major Global Influences No 7 Science v. Technology

Science is the search for truth (relative and not absolute) and knowledge, while technology is

the application of science. Truth and knowledge are culturally and value-based, ie what is

rational in one culture can be irrational in another. One of the challenges is to handle the cultural

differences (actual and perceived) in rational and irrational thinking.

Barbara Lepani has identified the key drivers of science and technology:

�...mind (extension of information technology into machine intelligence /consciousness);

life (development of DNA technology, and choreographing of life at will);

matter (the quantum revolution with the ability to manipulate and choreograph new forms of

matter, almost at will);

knowledge capital - the three drivers above are creating this...�

The use of technology is important. Over the last 50 years technology has been very successful

in reducing input costs and disseminating information. Technology is an essential, but not a

sufficient, tool for handling the future.

From now on, technology is expected to have most impact in the 4 areas: as identified by The

Australian Financial Review they are

• the Internet;

• digitilisation;

• the human genome project;

• nano-technology (moving from chemical to atomic manufacturing).

Nano-technology promises to have the greatest impact with the possibility of ending scarcity.

One of the biggest challenges of technology is to keep it simple and user-friendly.



The Information Age has doubled the world and exponentialises our inputs, forcing us to deal

not only with reality itself, but with a constant stream of information about reality. The Internet

is the most obvious illustration of the Information Age: no one owns it and it has caused an

explosion of data that is now more readily available. As most of this data is "mere noise", one of

the challenges is turning this data into something useful like information and knowledge. A

further evolution is that the Internet is changing the boundaries of what has been regarded as

private and public domains.

Technology will allow us to undertake great technical works that are currently perceived as

impossible to achieve, in the same way that getting a man to the moon was perceived in the late

1950s.

As Peter Drucker writes,

�...Currently around 90% of the traditional sources of information for an organisation are

sourced from inside the organisation and/or the industry, yet around 50 % of the technology that

affects an organisation and industry comes from outside...�

Increasingly organisations will need to look outside their industries for answers. In fact,

knowledge has crossed the boundaries between industries, between organisations and between

occupations. Empowered individuals are utilizing the transferability of their knowledge, skills

and abilities in search of right-fit.

Knowledge makes resources mobile, especially as knowledge workers will carry knowledge in

their heads. This will mean that management systems and organisational structures will

change. There will be a shift from full-time employees to more contractors, experts, consultants,

part-timers, joint venture partners, etc. An increasing number of people will identify themselves

by their own knowledge rather than by the organisation that pays them. As a result there will be

many different types of organisational structures. Every organisation will have to be designed for

a specific task, time and place or culture, as exemplified in the establishment of temporary

structures such as task forces and teams. Already there is a movement away from a position-

based workforce to a project-based workforce; getting the work done in this changing workplace

is increasingly reliant upon self-management within clearly defined organisational boundaries.

This leads to the concept of self-organisation as described by William Bridges: all workers

essentially work for themselves and are self-employed, irrespective of whether they work in their

own organisation or in an organisation owned by someone else.



An increasing amount of work is being done on the issues of knowledge management, ie the

assessment of knowledge assets, new approaches to organisational and individual learning, and

the attempt to create a metric for dealing with knowledge. Yet some professions, like

economists, ignore or underestimate knowledge as a factor of production.

Technical tools are becoming more complex and inter-connected, and more central to operating

a business. At the same time, we are suffering from �information overload�, a term which

describes the gap between the volume of information and its effectiveness. Paul Saffo suggests

that technology will develop new sense-making tools that will help people visualize and

simulate. Visualization techniques will reduce vast and obscure pools of data into easily

comprehended images. Simulation systems will become intellectual training wheels for

executives, allowing them to experiment with strategies in the forgiving world of cyber space,

just as the Gulf War pilots ran practice missions before flying the real thing.


Social Cohesion

(human and cultural alignment)

Social cohesion - as achieved by the art of human and humane leadership and management - is

one of the dominant challenges and needs a keen insight into the human condition. The

temptation, as simulation and other sense-making tools become more sophisticated, will be to

rely on substitutes for human judgment.

Models of reality and developing wisdom are integral parts of social cohesion.

Barbara Lepani identifies the models of reality to be:

�...dualism (making a clear distinction between self and the external world, with a true/false

dichotomy);

multiplicity (recognition of many truths);

contextualised relativism (importance of context in defining true and false);

wisdom awareness (beyond the distortions of conceptual bias in perception)...�

Developing wisdom, according to Barbara Lepani, requires:

�...centeredness (a balance of equanimity and equality, the sense of personal spaciousness and

mindfulness that enables us to care deeply while detaching from specific events, and our

emotional reaction, long enough to see the larger patterns);



clarity (the ability to transcend self-interest and cultural bias to achieve a deeper understanding

of the interdependence of individuals and community; wealth creation and social development;

human culture and the biosphere in which we live);......

compassion (the limitless power of human love to transform suffering and create well-being in

ourselves and others) - compassion enables us to transcend self-protection to embrace our

connection to others, to live from the space of respect, equality, and a kind heart, to transform

fear, frustration and anger;

courage (wisdom in action, the ability to honour clarity and compassion in our thoughts and

actions, to face our fears, to be open to our vulnerabilities but resolute in our commitment to

embrace the joy of the dynamic flow of life)...�

Research by Arie de Geus on long-lasting and successful organisations shows that to survive

and thrive in the long-term, a viable business must have

• a consistent set of values based on an awareness of the organisation's own identity and the

community it belongs to and works with

• a willingness to change,

• a passionate concern for developing the capacity and self-confidence of its core

inhabitants as a community of human beings and proof that the organisation values these

more than its physical assets

• conservatism in financing

• actively fosters a learning environment

• succession planning, ie organising for continuity from one generation of management to the

next.

On the other hand Peter Drucker states

�...every organisation has to prepare for the abandonment of everything it does...�

There is an increasing rejection of specialisation, with a corresponding return to the traditional

model of community: to a society that gave equal respect to elders for the wisdom, teachers for

their ability to help people grow; �warriors, weavers and growers� for their life skills.

It is better to convince people to change via dialogue than coercion. With dialogue, people get

ownership - they �buy in�. In contrast, with coercion there is the inevitable backlash that shows

up in resistance and avoidance of imposed policies. This backlash will almost always have

significant destructive consequences.

We need to develop better ways to both analyse and solve problems. The current adversarial

approach (either-or) or dichotomised thinking (win-lose) has many drawbacks: people take



opposing views and agree to disagree. There is the need to develop an approach based on "win-

win" with �buy-ins�, and a possible sequence suggested by Robert Theobold is

• core creativity (defining commitments and desired directions);

• hopeful realism (discovering the realities which determine what can, and cannot, be done

and this involves understanding different rationalities, experiential learning and value

choices, and asking the �right� question);

• creating coalitions (finding the individuals and groups which will join together in effective

thought and action);

• committed action (determining appropriate steps which create movement in desired

directions: to determine a degree of action which can be transformative).

Appendix 1 Some questions, suggested by Rowan Gibson, that need to be asked

1 General

• Why is the nature of competition changing so drastically? And what should we do about it?

• What exactly is the new network economy? How does it work? And why will it be so

fundamentally different from the industrial economy?

• Will it be better to be big and powerful or small and flexible in the global economy? Should

companies be broadening their product lines in order to serve the world? Or should they

become more specialized and focused?

• Will technology make geographical locations increasingly irrelevant? Or will it make

particular locations more important for particular industries in the next century?

• Why will global economic battles of next century be so different from the previous economic

battles? How important will Asia's role be in the battle? Will the modernisation of Asia shift

the world's center of economic, political and culture gravity from the West back to the East?

• Now that the old fight between communism and capitalism is basically over, will the new

fight emerge between the different forms of capitalism? Does the concept of capitalism have

a bright future at all? Or has economic progress turned out to be an empty promise?

• As technology democratises not just the workplaces, but our societies and our world, does it

mean the end of government as we know it? Are we heading into a world that is essentially

ungovernable, out of control?



2 Organisations

• How do we go about changing how our mental models into ones that are more systemic in

nature, so that we can learn to look at the whole organisation and not just at some part of it

that needs to fixed?

• What kind of role will technology play in the business transformation process?

• How do you go about creating a radically decentralized, networked organisation? And does

federalism provide us with the useful model for making it work?

• What is it that truly binds a networked organisation together? Is it merely information

technology? Or is it something deeper and far more meaningful?

• How does an organisation make the shift from just spreading information around a network

to building new knowledge? Is it really possible to set up a "learning infrastructure"? And if

so, will organisations begin to look more like universities than business institutions?

• What sort of principles will guide the successful 21st century organisation? Should top

management give their people a meaningful share and voice in the ownership and the

running of the organisation? And what does it take to build a "high trust" culture?

• As organisations and their networks become increasingly complex, how will we control

them? And should we even try? Or will companies instead develop a bottom-up kind of

control such as found in a flock of birds, or swarm of bees?

• If the traditional concept of management it isreaching the end of the road, will there be any

role at all for the managers and for hierarchy in the future organisation?

• Will the shift to a new management model be a global phenomenon? Or will there be

different rates of progress in different parts of the world?

3 Leadership and strategy

• Are organisations spending too much time managing the present and not enough time

creating the future? Why is it so challenging to think strategically about the future? And

how do you create the incentive within an organisation to do so?

• What should an organisation involve in the process of developing and implementing

strategy? What should be the role of senior management in this process?

• How strategically focused can a huge organisation be? And should small organisations take

a more flexible view of strategy than their bigger competitors?

• How important will technology be to creating a competitive advantage in the future? Will it

have a long-term effect on strategy, or be more a tactical element?



• How can organisations balance the need for radical change with the need for strategic

continuity? When does is it actually become necessary to change your competitive strategy?

• How can organisations make the most of emerging opportunities? And how can they de-risk

these opportunities?

• What will be the essential differences between 20th century leadership and 21st century

leadership? Will it take a special kind of leader to succeed in the global economy? And what

impact will information technology have on the way leaders lead?

• Why is it so important to be " leader of leaders"? And how can we encourage leadership at

all levels of the organisation?

• What can leaders do to ensure that their corporate culture will be a strategic asset rather than

a change anchor?

• Is it the organisation's responsibility to give people a purpose in life?

References • Atlee, Tom, as quoted in Theobold, Robert, (1997), Reworking Success: New Communities

At The Millennium, (New Society Publishers)

• Aurora Consulting Group, (1998), Personal Communications

• Australian Financial Review, (1998), Mastering Global Business-Part 1, Mapping The

Business Horizons, (, (Australian Financial Review, Sept. 2, 1998)

• Australian Financial Review, (1998), The Corporate Seers (Outlook, , (Australian Financial

Review, Sept. 26, 1998)

• Brain, Peter, (1999), The Battle to Cope with the Second American Revolution, (, (Australian

Financial Review, April 10, 1999)

• Bridges, William, (1995), Jobshifts: How To Prosper In A Workplace Without Jobs as

quoted in Sawford, Gil, (1998), Rightplacement - An Alternative To Downsizing,

Alternatives To Downsizing, (WORLD Seminar, Nov. 1998)

• Brown, David & Brooks, Len, (1990), Career Choice And Development: Applying

Contemporary Theories To Practice as quoted in Sawford, Gil, (1998), Rightplacement - An

Alternative To Downsizing, Alternatives To Downsizing, (WORLD Seminar, Brisbane, Nov.

1998)

• Brown, Gavin, (1999), Education for Innovation: Creating Tomorrow�s Workforce,

(Australian Financial Review, April 16, 1999)



• Capra, Fritjof, (1992), The Toa Of Physics, as quoted in Sawford, Gil, (1998),

Rightplacement - An Alternative To Downsizing, Alternatives To Downsizing, (WORLD

Seminar, Nov. 1998)

• Capra, Fritjof , (1997), The Web Of Life: A New Synthesis Of Mind And Matter, as quoted

in Passfield, Ron, (1998), Learning For Leadership And Sustainable Profitability,

Alternatives To Downsizing, (WORLD Seminar, Brisbane, Nov. 1998)

• Courier Mail, (1998), Infotronics Age Widens the Generation Gap (p4, November 16, 1998)

• Darwin, Charles as quoted in Augustine, Norman, (1998) Reshaping An Industry: Lochheed

Martin�s Survival Story, Harvard Business Review On Change, (Harvard Business School

Press)

• Dawkins, Peter (1999), Balancing Soft Hearts and Hard Heads in the Lucky Country,

(Australian Financial Review, April, 1999)

• de Geus, Arie, (1997), The Living Company, (Harvard Business Review, March- April,

1997)

• Drucker, Peter, (1997), Looking Ahead: Implications Of The Present, The Future Has

Already Happened (Harvard Business Review, September-October, 1997)

• Flattery, Tim; Herceg, Rosemary; Dunlap, Al, (1999), Dunlap Theory Unrapt, (Australian

Financial Review, May 1999)

• Gibson, Rowan, (1998), Rethinking Business in Rethinking the Future, (Nicholas Brealey)

• Hamel, Gary, (1997), Killer Strategies That Make Shareholders Rich, (Fortune Magazine,

June 23, 1997)

• Handy, Charles, (1997), Looking Ahead: Implications Of The Present, The Citizen

Corporation, (Harvard Business Review, September-October, 1997)

• Harding, Ann, (1999), As well as Rich versus Poor, it�ll be on for Young and Old,

(Australian Financial Review, April 16, 1999)

• Harman, Willis in An Incomplete Guide To The Future, as quoted in Theobold, Robert,

(1997), Reworking Success: New Communities At The Millennium, (New Society

Publishers)

• Henderson, Anne, (1999), Desperately Seeking the Society within the Economy, (Australian

Financial Review, April 16, 1999)

• Kotter, John, (1996), Leading Change, (Harvard Business School Press)



• Langford, Hillary and Oliver, Ian, (1997), Wiping The Blood Off The Floor! Understanding

& Managing The Emotional Chaos Of Change, (Third Australia & New Zealand Systems

Conference, Uni. Of Qld, Gatten)

• Lepani, Barbara, (1998), Managing The Tension Between Surviving Now And Creating A

Prosperous To-morrow (AHRI Conference, Brisbane, Aug. 1998)

• Parker, David & Stacey, Ralph, (1995), Chaos, Management And Economics - The

Implication Of Non-Linear Thinking, (Centre For Independent Studies, UK)

• Passfield, Ron, (1998), Learning For Leadership And Sustainable Profitability, Alternatives

To Downsizing, (WORLD Seminar, Brisbane, Nov. 1998)

• Pearson, Brendan, (1999), Cultural Perversity, (Financial Review, May 10, 1999)

• Saffo, Paul, (1997), Looking Ahead: Implications Of The Present, Are You Machine Wise

(Harvard Business Review, September-October, 1997)

• Sawford, Gil, (1998), Rightplacement - An Alternative To Downsizing, Alternatives To

Downsizing, (WORLD Seminar, Brisbane, Nov. 1998)

• Senge, Peter, (1997), Looking Ahead: Implications Of The Present, Communities Of Leaders

And Learners, (Harvard Business Review, September-October, 1997)

• Suzuki, David with McConnell, Amanda, (1997), The Sacred Balance: Rediscovering Our

Place In Nature (Allen & Unwin)

• Theobold, Robert, (1997), Reworking Success: New Communities At The Millennium, (New

Society Publishers)

• Tzu, Loa, as quoted in Australian Financial Review, (1998), The Corporate Seers (Outlook,

Australian Financial Review, Sept. 26, 1998)

major global influences at the start of the new millennium

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